A new report from the Practical Justice Initiative at UNSW Sydney asks policymakers, and society more broadly, to reflect on the values that guide our insurance models in the light of climate-induced extremes like the 2019-20 megafires in Australia.
Under Australia’s current bushfire insurance regime, more than 445,000 homes are predicted to be uninsurable within 30 years. This number is estimated to rise to one in 20 homes by the end of the century.
The Social Justice and the Future of Fire Insurance in Australia report proposes the adoption of an alternative insurance model which will ensure housing security for future generations. It recommends government-led insurance, similar to the Medicare model, as the most ethical approach.
“Under this Fairness as Social Justice model, goods that are basic requirements should be provided independently of individuals’ risks and choices,” says Professor Jeremy Moss from the Practical Justice Initiative at UNSW Arts & Social Sciences. “This would ensure housing security from climate-induced extremes for future generations.
Professor Moss says the report takes a first step in outlining the values and models for responding to the problem and aims to raise some important issues for public debate.
“The issue of climate change and bushfire insurance also raises broader issues concerning how we as a society should share the burdens of responding to climate change. We need to make decisions about how much risk individuals should be asked to bear and whether society should allow widespread ‘climate disadvantage’,” he says.
Bushfire insurance in Australia is only one example of climate risk having a major impact on people’s wellbeing. California has an increasingly extreme risk of wildfires, and since 2018 its insurance premiums have risen as much as 300% to 500% in some cases, with insurers refusing to renew insurance for more than 340,000 homes.